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NIMMO 

NICARAUGA  CANAL  IN  ITS 
RELATIONS  TO  CHICAGO 
AND  THE  NORTHWEST 


THE  LIBRARY 
OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


THE  NICARAUGA  CANAL 

In  its  relations  to 

CHICAGO  and  the  NORTHWEST 

[Given  to  the  Press  April  28,  1900.] 

Since  the  incorporation  of  the  Maritime  Canal  Com- 
pany of  Nicaragua  in  the  year  1889,  the  proponents  of 
that  scheme,  in  Congress  and  out  of  Congress,  have  per- 
sistently opposed  any  thorough  and  impartial  official 
investigation  designed  to  make  known  the  probable 
cost  of  the  canal,  the  relative  merits  of  rival  routes,  the 
commercial  possibilities  of  any  American  interoceanic 
canal,  or  even  the  military  value  of  the  project.  At  the 
present  time  they  are  putting  forth  strenuous  sfforts  to 
forestall  and  defeat  investigations,  in  prca^  ss,  in  the 
hands  of  commission  appointed  a  year  by  the 

President  nder  an  appropriation  of  one  milh  a.  dollars 
for  the  purpose  of  determining  these  vital  questions. 
This  persistent  opposition  constitutes  a  conf  ,ssion  of 
the  weakness  and  unworthiness  of  the  scheme. 

One  of  the  most  important  of  the  neglected  j  hases  of 
the  canal  scheme  is  its  probable  effect  upon  "he  com- 
mercial interests  of  Chicago  and  the  Northv  jst.  No 
Committee  of  Congress,  and  no  officer  of  the  govern- 
ment has  ever  investigated  and  reported  upon  this  sub- 
ject, and  no  Senator  or  Member  of  Congress  has  ever 
attempted  to  prove  from  geographic,  economic  and 
commercial  data  that  a  Nicaragua  Canal  would  be  of 
benefit  and  not  an  injury  to  that  particular  section  of 
the  country.  I  beg  leave  to  invite  public  attention 
briefly  to  a  few  of  the  more  important  facts  bearing 
upon  this  particular  subject. 

When  the  rush  of  immigration  to  California  began 
in  the  year  1849,  the  American  isthmus  presented  the 
I  only   practicable   route  from   Atlantic    Seaports  to  El 
Dorado.     The  completion  of  the  Panama  Railroad  in 
the  year  1855  greatly  enhanced  the  value  of  the  isth- 


2 

mian  route  ;  but  upon  the  completion  of  the  Union- 
Central  Pacific  Railroad  in  1869,  the  carriage  of  passen- 
gers, the  mails,  bullion,  express  goods  and  fast  freights 
generally,  passed,  at  once  and  forever,  to  the  trans- 
continental route.  At  the  present  time  there  are  seveh 
transcontinental  railroads  in  the  United  States.  The 
efficiency  of  these  important  highways  of  commerce 
has  been  enormously  increased  as  the  result  of  improve- 
ments in  track,  Icomotives,  cars  and  facilities  generally. 
To-day  the  90-ton  locomotive  hauling  a  train  of  freight 
cars  over  a  90-pound  steel  rail  is  the  grandest,  and  the 
most  efficient  instrument  of  commerce  ever  seen  on  this 
planet,  not  excepting  any  ship  that  ever  sailed  the  seas. 
If  there  were  a  river  a  mile  wide  and  twenty  feet 
deep  from  Chicago  to  San  Francisco  it  would  be  infer- 
ior, as  a  highway  of  commerce,  to  any  one  of ,  the  rail 
lines  now  connecting  those  cities.  The  sooner  this 
important  economic  fact  of  the  age  is  acknowledged 
the  better  it  will  be  for  the  country. 

Astonishing  reductions  in  rates  have  accompanied 
the  phenomenal  development  of  transcontinental  com- 
merce. According  to  data  recently  published  by 
the  Bureau  of  Statistics  of  the  Treasury  DeparGment, 
the  average  rate  per  ton  per  mile  on  transcontinental 
railroads  fell  from  4.50  cents  in  1870  to  .99  cents  in 
1898,  a  fall  of  3.81  cents  per  ton  per  mile.  In  other 
words,  the  rate  in  1898  was  less  than  one-fourth  the 
rate  in  1870. 

The  growth  of  the  transcontinental  rail  traffic  may 
be  inferred  from  the  fact  that  the  overland  traffic  of  the 
Southern  Pacific  system  increased  from  98,657  tons  in 
1872  to  1,867,750  tons  in  1898. 

The  fruits  of  California,  Oregon  and  Washington  are 
found  to-day  in  every  grocery  store  and  at  every  fruit 
stand  from  the  Sierra  Nevada  range  to  Eastport,  Maine. 
This  traffic  moves  entirely  by  rail.  The  eastward  ship- 
ments of  green  fruit  increased  from  2,896,530  pounds 
in  1873  to  262,294,170  pounds  in  1897,  and  of  dried 
fruits  from  nothing  in  1873  to  142,575,660  pounds  in 


re 


1897.  An  enormous  transcontinental  traffic  in  lumber 
and  timber  has  also  been  developed,  and  can  never  be 
diverted  to  any  isthmian  canal  route. 

Eight  years  ago,  as   the  result  of  careful  computa- 

tion, I  ascertained  that  the  value  of  the  commerce  of 

the  so-called  Arid  Region  with  other  parts  of  the  United 

States  amounted,  in  a  single  year,  to  $440,000,000,  ex- 

"    ceeding  the  total  value  of  the  foreign  commerce  of  the 

~"3'  United  States  with  Asia,  Oceanica,  South  America  and 

^  the  West  Indies  Islands  combined.     This  internal  com- 

merce was  a  creation  of  the  facilities  of  transportation 

^  by  rail. 

The  total  value  of  the  products  of  all  industries  in 

^  the  Pacific  Coast  States  and  in  the  Arid  Region  now 

•i-  amounts    to    fully    $700,000,000    annually.     This   has 

given  rise  to  an  enormous  overland  commerce  where 

only  40  years  ago  were  the  homes  of  savages  and  the 

solitude  of  the  desert.     Chicago  has  become  the  chief 

commercial  centre  of  the  vast  internal  commerce  thus 

created. 

Now  the  question  arises,  What  benefit  can  possibly 
accrue  to  Chicago,  or  to  the  hundreds  of  towns  and 
cities  of  the  Northwest  from  the  construction  of  the 
Nicaragua  Canal  ?  I  answer,  that  canal  can  have  no  rel- 
ation to  the  commerce  of  the  Northwest  with  the  Pacific 
Coast  and  the  vast  interior  except  the  relation  of  com- 
petitor. I  have  wondered  much  and  have  waited  long 
to  learn  from  the  chief  advocate  of  the  Nicaragua  Canal 
in  the  House  of  Representatives  —  Mr.  Hepburn  —  the 
grounds  upon  which  he  bases  his  expectations  of  advan- 
tage to  the  Northwest  from  the  construction  of  the 
Nicaragua  Canal,  but  all  in  vain.  At  last  I  have  been 
led  to  suspect  that  there  may  possibly  be  revolving  in 
his  brain  some  plan  for  establishing  a  line  of  prairie 
schooners  between  Greytown,  Nicaragua,  and  Clorinda, 
Iowa.  Surely  he  is  laboring  under  some  sort  of  delu- 
sion; for  the  idea  of  promoting  or  in  any  way  benefit- 
ting  the  commercial,  industrial  or  transportation  inter- 
ests of  Chicago,  of  the  Northwest,  or  of  the  vast  inte- 


rior,  through  the  construction  of  the  Nicaragua  Canal 
has  no  other  basis  than  "such  stuff  as  dreams  are 
made  of." 

It  is  easily  demonstrable  that  if  the  Nicaragua  Canal 
were  completed  to-day,  at  rates  for  tolls  now  charged 
on  the  Suez  Canal,  the  overland  rail  routes  would  still  con- 
trol all  traffic  between  the  Pacific  Coast  and  the  Appa- 
lachian Range,  or  say  a  line  embracing  Chattanooga, 
Tenn.,  Parkersburg,  W.  Va.,  Wheeling,  W.  Va., 
Pittsburg,  Pa.,  and  Buffalo,  N.  Y.  Besides  the  all  rail 
lines  would  continue  to  secure  all  the  passenger  traffic, 
the  mails,  express  goods  and  all  fast  freights  between 
Atlantic  and  Pacific  ports  of  the  United  States. 

Mr.  Hepburn  has  recently  discovered  a  new  way  of 
attacking  the  commerce  of  the  Northwest  with  his 
Nicaragua  Canal  project.  He  proposes  to  make  the 
Nicaragua  Canal  a  free  canal.  In  that  event,  the 
overland  routes  and  all  interior  markets  would  be  han- 
dicapped by  enormous  governmental  subsidies.  First, 
the  Northwest  and  the  great  interior  would  be  taxed 
their  full  share  of  fully  $200,000,000  for  the  construc- 
tion-of  a  route  at  rivalry  to  those  routes  which  have 
built  up  their  vast  wealth  and  enormous  commerce, 
and  for  the  promotion  of  the  commerce  of  trade  centers 
rivals  to  Chicago  and  to  the  towns  and  cities  of  the 
Northwest.  Besides  the  great  West  and  vast  interior 
would  be  taxed  their  full  proportion  of  about  ten  million 
dollars  a  year  for  interest  and  the  cost  of  maintaining 
and  operating  this  rival  route. 

The  natural  commercial  entrepots  of  our  growing 
Asiatic  and  Oceanic  commerce  are  San  Francisco  and 
other  Pacific  Coast  ports.  Do  the  people  of  Chicago 
and  the  Northwest  desire  to  have  this  promising  com- 
merce deflected  from  them  through  the  power  of  enor- 
mous governmental  subventions  of  which  they  will  be 
called  upon  to  pay  their  proportional  share  ? 

In  this  connection  the  question  might  also  be  asked 
— why  should  the  people  of  California  desire  to  see  a 
large  proportion  of  the  Asiastic  and  Australian  com- 


merce  of  the  country  directed  from  San  Francisco  to 
the  Nicaragua  route? 

But  there  stands  the  self-convicting  admission  to  the 
whole  world  on  the  part  of  the  advocates  of  the  Nica- 
ragua Canal  that  they  have  for  ten  years  bitterly 
opposed  any  official  inquiry  as  to  its  commercial  possi- 
bilities or  its  military  value.  As  an  officer  of  the  gov- 
ernment and  as  private  citizen  I  have  proved  that  the 
Nicaragua  Canal  could  not  under  existing  circum- 
stances, and  at  toll  rates  equal  to  those  charged  on  the 
Suez  Canal,  secure  over  300,000  tons  of  shipping  annu- 
ally as  against  6,000,000  tons  claimed  by  the  canal  ad- 
vocates. They  do  not  even  attempt  to  prove  the  incor- 
rectness of  my  figures,  nor  the  correctness  of  their  own. 
They  have  shirked  the  issue  when  challenged  to  meet 
it.  On  page  4  of  his  report  of  Feb.  17,  1900,  Mr. 
Hepburn  virtually  confesses  that  he  and  his  committee 
are  utterly  at  sea  in  regard  to  the  amount  of  tonnage 
which  would  pass  through  the  canal  annually.  In  the 
year  1880 — twenty  years  ago— as  chief  of  the  Bureau 
of  Statistics  in  the  Treasury  Department,  at  the  earnest 
request  of  the  American  Society  of  Civil  Engineers,  I 
computed  the  probable  amount  of  tonnage  which  would 
pass  through  any  American  isthmian  canal.  The  pro- 
ponents of  the  Nicaragua  Canal  project  appear  to  have 
lacked  the  courage,  either  to  have  this  report  officially 
reviewed  or  to  make  a  fresh  investigation.  They  have 
however,  deemed  it  to  their  interest  to  deny  the  cor- 
rectness of  my  report  of  1880,  and  to  impeach  my  capa- 
bility in  the  line  of  a  profession  which  has  become  the 
occupation  of  my  life. 

Two  serious  charges  confront  the  advocates  of  the 
Nicaragua  Canal  : 

First,  in  the  pending  bill  in  the  House  of  Representa- 
tives they  seek  to  forestall  and  evade  the  possible  re- 
sult of  investigations  as  to  route,  traffic  and  military 
value  instituted  by  the  government  at  a  cost  of  one 
million  dollars  appropriated  less  than  a  year  ago.  This 
is  bad  policy  and  abominable  politics. 


6 

Second,  they  seek  to  repudiate  a  solemn  treaty  obli- 
gation. There  are  three  ways  of  opposing  an  objection- 
able treaty.  The  first  is  to  alter  or  annul  it  through 
diplomatic  procedure.  The  second  is  to  abrogate  it  by 
due  notice  and  procedure  conformable  to  the  usages  of 
international  law.  The  third  method  is  to  repudiate  it. 
The  latter  involves,  in  the  case  of  the  objectionable 
Clayton-Bulwer  Treaty,  a  compromise  of  the  national 
character. 

There  is  another  aspect  of  the  case  worthy  of  notice. 
The  original  amount  proposed  to  be  appropriated  in  the 
House  of  Representatives  was  $140,000,000.  When 
the  Hay-Pauncefote  Treaty  appeared  on  Feb.  5,  1900, 
this  amount  was  suddenly  (on  Feb.  17,  1900)  reduced 
to  $10,000,000.  The  first  expenditure  for  any  canal 
would  naturally  be  for  the  right  of  way.  This  is  os- 
tensibly held  by  the  Maritime  Canal  Company,  of  Nica- 
ragua, and  its  putative  successor.  These  companies 
hold,  or  profess  to  hold,  franchises  on  property  rights, 
declared  by  them  to  .be  worth  about  $10,000,000. 
Here  is  a  coincidence.  The  whole  scheme  demands 
investigation.  At  any  rate,  it  is  to  be  hoped  that  after 
wasting  ten  years  in  the  policy  of  preventing  any  official 
inquiry  as  to  the  commercial,  military,  and  inter- 
national aspects  of  the  isthmian  canal  question,  the 
honorable  course  of  thorough  and  impartial  investigation 
instituted  a  year  ago  will  be  allowed  to  prevail. 

I  sincerely  hope  that  the  people  of  the  Northwest  will 
demand,  that,  in  so  far  as  relates  to  their  interests,  the 
policy  of  secrecy  and  evasion  shall  cease,  and  that  they 
shall  be  informed  by  their  Senators  and  Reprei^enta- 
tives  in  Congress  as  to  the  exact  status  of  the  Nicara- 
gua Canal  project,  especially  in  its  relations  to  their 
vast  commercial  and  industrial  interests. 

JOSEPH  NIMMO,  JR. 
WASHINGTON,  D.  C., 

April  25,  1900. 


The  Historic  Status  of  the 

Nicaragua  Canal  Scheme. 

The  root  of  the  whole  matter  may  be  stated  in  a  para- 
graph. In  the  year  1850,  two  great  nations — The 
United  States  and  Great  Britian,  united  in  a  com- 
pact, known  as  the  Clayton-Bulwer  Treaty,  to  guaran- 
tee protection  to  private  capital  which  might  embark  in 
the  construction  of  the  Nicaragua  Canal.  But  knowl- 
edge of  the  inadequate  commercial  value  of  the  under- 
taking has  prevented  private  capital  from  investing  in 
it.  Men  of  large  experience  and  practical  knowledge 
of  commercial  enterprise  in  that  quarter  of  the  globe, 
have  thoroughly  investigated  the  Nicaragua  Canal  pro- 
ject, and  condemned  it  on  commercial  and  economic 
grounds.  Among  this  number  is  the  late  Col.  North 
of  England,  the  so-called  "Nitrate  King."  Since  the 
year  1850,  the  Suez  Canal,  a  sea-level  canal,  formed  by 
excavating  mud  and  desert  sands,  has  been  constructed, 
and  forms  a  short  interior  line,  without  railway  compe- 
tition, between  the  ports  of  Europe  and  the  ports  of 
Asia  and  Oceanica.  This  route  is  also  greatly  superior 
to  the  Nicaragua  route  for  trade  between  Atlantic  ports 
of  the  United  States  and  the  ports  of  Asia  and  Oceanica. 
Railroads  have  also  been  constructed  across  the  Ameri- 
can continent,  each  one  of  which,  as  already  shown, 
affords  a  better  solution  of  the  commercial  question  in- 
volved than  does  the  Nicaragua  Canal. 

But  a  set  of  men — enthusiasts,  dreamers,  retired  poli- 
ticians and  speculators — seeing  the  failure  of  the  trans- 
isthmian  scheme  as  a  commercial  enterprise,  undertook 
to  carry  it  through  by  means  of  a  political  propaganda. 
At  the  very  beginning  they  recognized  the  fact  that  the 
truth  in  regard  to  the  commercial  economic  and  mili- 
tary aspects  of  this  scheme  would  be  fatal  to  it.  Ac- 
cordingly they  have  pursued  the  policy  of  suppressing 
official  information  which  might  expose  the  falsity  of 


8 

their  pretensions.     In  this  they  have  been  wonderfully 
successful. 

A  last  desperate  attempt  is  now  being  made  to  forestall 
official  information  actually  in  course  of  preparation, 
and  well  advanced  toward  completion,  at  an  expense  of 
one  million  dollars  to  the  government  of  the  United 
States.  Besides,  as  I  have  shown,  the  project  involves 
unjust  and  flagrant  discrimination  against  vast  com- 
mercial and  industrial  interests,  the  outcome  of  heroic 
effort  and  of  indomitable  enterprise.  Viewing  the  whole 
project  as  a  senseless  raid  upon  the  public  treasury  I 
plead  once  more  that  the  light  of  truth  may  be  permitted 
to  shine  upon  this  unworthy  scheme- 

.       JOSEPH  NIMMO,  JR. 
WASHINGTON,  D.  C., 

April  26,  1900. 


3  1158 ' 01328  0994 


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